In a 401(K) Plan that elects to use the Top Paid Group for defining HCEs,
is the Rate Group Testing limited to only those 20% HCEs ? ?

A rate group consists of each HCE and each other participant who has an equal or greater Allocation Rate or EBAR.

If someone would be an HCE but for the top paid group election, then he is not an HCE and therefore he does not create a rate group, in such case there is no rate group testing for such person.

p.s. Oh, re-reading your question, rate group testing does not apply to a 401(k) plan, just a plan or plan component that provides for employer contributions that are not part of an match program, and do not comply with safe harbor requirements.

This is a 401(K) Plan that has a New Comparability Profit Sharing Contribution component as well. So if I understand correctly, if the Plan makes the Top Paid Group election for defining HCEs, then that definition of an HCE applies for all purposes, not just ADP/ACP testing. So only the HCEs in the Top Paid Group need to be "tested". Other employees who would normally be a HCE, except for the Top Paid Group election now become NHCEs for "cross testing" - correct ?

Correct.

Thanks

watch out for the following. I actually had this happen in one plan.
A doctor was hired after 7/1. His comp was $$$$$$ in the initial year of employment. Because of the one year wait he was ineleigible, but when ranked by comp he was one of the HCEs . therefore the plan had one less HCE for testing purposes the following year.